In the last few days I’ve had two friends ask me about how they can remortgage to free up some cash. In both cases I said they didn’t need to.

One was my hairdresser who needs £4,000 for a medical procedure. I said it wasn’t worth remortgaging for that. He’d have to pay hundreds just for the arrangement fee. Crazy! For him I suggested he get a 0% on purchases credit card. There are some good ones around as we show in this article about the top 0% on purchases credit cards. He could use that then spend the next 12 months (in the case of the Tesco card) paying it off at no interest. If he has some left over at the end he could just switch to a 0% on balance transfers card. Again, there are some really good ones around including new 15 month offers from Natwest and RBS.

The other was my friend Lynn who wants to borrow £30,000 to pay for an extension she’s having built. She went to her mortgage company who were happy to do it, for £1,500. She was appalled. When she told me about it I asked if she had any savings. As it happens, she has £30,000 in cash Isas. Well, there you are, I said, cash those in and use that money. OK, it would mean that she wouldn’t have a cash cushion for a while but a) cash Isa rates at the moment are dismal, b) she wouldn’t have to pay any interest or fees and c) she has credit cards in an emergency and she can spend then next year or so building that cushion back up. In fact she already has £6,000 on her credit card that she needs to pay (it’s an expensive thing doing an extension!) so I’ve shown her our article on the best 0% balance transfer credit cards. She’s going to be working hard over the next year to pay all this off!

Yes, remortgaging can be a good idea, and in fact we’ve just updated our remortgaging article because there are some good new offers around and lenders are giving out more money than before. However, for small amounts – and particularly if you already have savings you could dip into if necessary – it’s just not worth it. Go for the cheapest option!